Driven by the rapid pace of AI adoption, technology has risen to second place in our global survey of the forces likely to shape real estate in 2026. Demographic and environmental factors slip slightly but remain central, while geopolitical and legislative themes maintain prominence as trade policy and housing affordability rise up political agendas.
There is a mood of renewed optimism as we enter 2026, but investors and occupiers have plenty to navigate. Here are the forces that will define markets in the year ahead.
Top themes shaping global real estate in 2026 And change from 2025
Source: Savills Research
1. Economic outlook boosts investment and occupier activity
The economic environment remains the single most important driver in 2026. Falling interest rates – expected to continue to trend toward the neutral rate – will support investment and occupier activity. However, with rates settling above pre-2020 norms, elevated capital costs continue to squeeze development viability.
Despite these challenges, optimism is returning. As markets adjust to the new rate environment, stronger occupier demand and available capital are supporting recovery in investment activity. We forecast this will drive global investment turnover to more than $1 trillion in 2026 [crosslink to investment outlook], the highest level since 2022.
2. Technology: AI reshapes real estate
Technology has climbed the rankings to become the second most important market driver, propelled by rapid AI adoption. AI’s impact on global workforces will vary by sector, influencing office demand and reshaping occupational strategies. While technology ranks lower in living sectors (see table below), AI-driven disruption will touch all asset classes.
For those who can navigate it, there is opportunity. AI is fuelling a data centre boom and promises transformative potential in PropTech, from predictive maintenance to automated property management. For investors, this means opportunities in digital infrastructure and the potential for operational efficiency gains across their portfolios.
3. Demographics and behaviour: people at the centre
Real estate ultimately serves people: property is where they live, work, shop and spend leisure time. Demographic dividends are spurring growth in markets such as India, Saudi Arabia and Vietnam, while migration and wealth flows continue to power hubs such as Dubai and Abu Dhabi.
Meanwhile, behavioural shifts favour experiential retail, best-in-class office space and residential products aligned with modern lifestyles. As a result, operational expertise is becoming a key differentiator, and markets with demographic tailwinds and lifestyle-driven demand will outperform.
4. Environmental pressures and regulation
Climate risks remain front and centre. In 2025 extreme events included Californian wildfires, flooding in Southeast Asia and heatwaves in Europe. The World Meteorological Organization warns that limiting warming to 1.5°C above pre-industrial levels is now virtually impossible without temporary overshoot, reinforcing the need for climate resilience.
Meanwhile, regulation is tightening: the EU’s Energy Performance of Buildings Directive will become national law in 2026, and Australia is set to introduce mandatory climate reporting. These measures will drive compliance costs and widen the gap between efficient and non-compliant assets. Retrofitting is no longer optional, it’s essential. Climate resilience and compliance will increasingly dictate pricing and liquidity.
5. Geopolitics: trade tensions and policy shifts
Geopolitics moves up one position to fifth overall and ranks second for the industrial and logistics sector. US tariffs on foreign imports disrupted trade in 2025, and 2026 will see further inflationary pressures as stockpile cushions decline.
This uncertainty has, in the near term, boosted logistics take-up by third-party logistics providers (3PLs). In 2026 we may see expansion of China+1 strategies, onshoring and the diversification of supply chains, boosting demand for logistics space in a wider range of beneficiary markets.
6. Legislation shaping living sectors
Domestic politics heavily influence housing markets. Housing affordability is a top issue for many electorates, prompting interventions such as property taxes, rent controls and planning reforms. For institutional investors, clarity is critical: uncertainty delays decisions. Where regulation is predictable, it can enable growth in rental housing investment; where it is unclear, capital hesitates. This will be a trend to watch in 2026 as more markets explore their policy options.
7. Social and governance: balancing ESG priorities
Environmental issues have historically been the main ESG priorities for real estate decision-makers, but social and governance are likely to gain prominence in the year ahead. Real estate needs purpose, and some forward-thinking stakeholders are starting to see social value not as a cost, but as an investment opportunity that protects long-term value.
Themes shaping real estate in 2026 – by sector
Source: Savills Research
Themes shaping real estate in 2026 – by market
Source: Savills Research
